Compact Membrane Systems raises $16.5M Series A

A recently closed Series A fundraising round will allow Compact Membrane Systems to scale its Optiperm membrane, seen here in miniature form during a spring visit by state leaders. | DBT PHOTO BY JACOB OWENS

NEWPORT – Compact Membrane Systems (CMS), a manufacturer and developer of membrane technology used in industrial applications, has secured a $16.5 million Series A fundraising round that will help it scale commercial projects.

Founded 30 years ago by Stuart Nemser, who spun out research from DuPont to make CMS, the company has long produced membranes that are used in the petrochemical industry, helping to keep transformers on and able to do preventative maintenance.

About eight years ago, however, when Stuart’s daughter, Erica, was named CEO following a career at McKinsey & Co., CMS began to branch out toward carbon capture and greener industrial practices.

Christine Parrish, business development lead at Compact Membrane Services, shows a unit to Gov. John Carney during a visit to their Newport site in March. | DBT PHOTO BY JACOB OWENS

Its patented membrane, Optiperm, can assist in the separation of olefin and paraffin – compounds that include things like propane gas for your grill and polypropylene that makes much of the world’s plastic – while reducing the greenhouse gas emissions from the energy-intensive process by 70%. But it also can assist in carbon capture, separating nitrogen from carbon dioxide, allowing the harmless gas to pass through emission stacks while sequestering the harmful greenhouse gas.

It’s completed a successful olefin pilot project at the Delaware City Refinery and last year began a larger demonstration project at the Braskem plant in Marcus Hook, Pa.

Success in those projects convinced CMS to seek outside funding that could help it scale the work and sign new customers to advance its work on olefin and carbon. The oversubscribed Series A round was led by Pangaea Ventures, a major Phoenix-based tech and impact investment fund.

“We are excited to support CMS as they work to bring their innovative carbon capture technology to market,” said Chris Erickson, partner at Pangaea Ventures, in a statement announcing the investment. “Their technology has the potential to significantly reduce carbon emissions from industrial processes, and we look forward to seeing their continued progress.”

Also included were GC Ventures, the venture capital arm of Thai petrochemical giant PTT Global Chemical; Chevron Technology Ventures, the venture arm of gas giant Chevron; Solvay Ventures, the venture arm of Belgian chemical company Solvay; and Technip Energies, a French company that provides engineering and technology to the energy sector.

Erica Nemser, CEO of CMS, said that the new funding will allow her company to scale quicker to market. | DBT PHOTO BY JACOB OWENS

Although uncommon for a company to seek venture capital after decades in business, Erica Nemser said CMS’ experience gave it greater credibility with investors and customers, and the new funding would allow the company to transform for emerging opportunities quicker.

“We’re shifting the company from a small business to a venture-scale enterprise, meaning that the potential markets are multibillion-dollar markets, but it also means that we need to access investment capital to pursue those,” she told Delaware Business Times.

Much of that funding will be used to deploy new demonstration and pilot systems in the field for carbon capture. Last month it signed pilot project deals with Austrian steelmaker voestalpine and Austrian refractory producer RHI Magnesita, both of which it was introduced to through a Verbund X, an accelerator program.

“We found that to be a really effective forum of identifying customers who are not just interested in CO2 but committed to taking action and moving forward down that path,” Nemser said.

Nemser is confident in CMS’ future in an increasingly crowded green technology market because of their years of experience and the quality of its product. The company’s membrane units are cheaper with lower energy needs than competing products and can be retrofitted to existing applications relatively easily with a small footprint.

“When we talk to our customers about putting these systems in the field, we can say we’re going to be ready for you in 2026 for a full-scale system,” she said.

Compact Membrane Systems, a growing firm in Newport, will have to expand its production as it scales. | DBT PHOTO BY JACOB OWENS

For now, CMS will utilize its existing 10,000-square-foot lab and production facility in Newport along with those of its investment partners to produce demonstration-scale carbon capture units. To meet the demands of full-scale commercial units though, Nemser said the company would have to expand its manufacturing footprint.

The company has already been growing its staff, adding three positions this year to bring its headcount to 24, Nemser said. CMS expects to hire about nine more positions in the near term, she added.